Regulation Watch

Regulation Watch is a resource aimed at providing our members with updates on the activity of the sector's regulators, highlighting areas of specific interest. 


Speech by Johnathan Davidson, FCA Director of Supervision, Retail and Authorisations, in which he makes key points about the ongoing focus on culture change and the importance of individual accountability. Culture and Conduct

The FCA has released a new guide setting out the foundations for good cyber security. The guide aims to help firms, particularly smaller businesses, become more resilient to cyber attacks and to respond more appropriately to cyber incidents. More info can be found on cyber resilience the FCA's website.

The UK Cards Association has released a new guide to help finance providers identify and support customers in vulnerable situations: Vulnerability: a guide for lending.

Speech by Mark Steward, Director of Enforcement and Market Oversight at the FCA: The expanding scope of individual accountability for corporate misconduct.

Short speech by Mark Carney, Governor of the Bank of England, in which he states that, "the UK has instituted a unique Senior Managers Regime to embed cultures of risk awareness, openness and ethical behaviour. Based on its early successes, international authorities are now considering following the UK’s lead".

Jamie Symington, Director of Investigations at the FCA talks about the evolving approach to investigations at the regulator. 

Recent News

Senior Manager & Certification Regime (SMCR): The consultation period for the initial proposals for the extension of the SMCR to all FS regulated firms closed at the start of November. We expect a further consultation on the more technical aspects of this to follow towards the end of this year. To view our response to the paper, please click here.   
FCA Future Approach to Consumers: As promised in the FCA's Mission earlier this year, this paper has been published as the first in a series explaining the regulator's planned approach to regulation and supervision in order to meet its objectives and ensure greatest public value from the application of its resources. It contains some interesting analysis of data from the FCA's 'Financial Lives' survey 2017 and seeks to broaden the debate on issues first raised in its Mission
The Banking Standards Board (BSB) has published a consultation on a similar topic. It asks 'What do good outcomes look like for banking customers'. The BSB seeks to develop a 'Consumer framework' which will allow it to consider further guidance to banks to achieve better outcomes for their customers. The BSB is also hoping to engage through this work with consumer and civil society organisations. Details can be found here.
Fitness and Propriety Assessment: Early this year the Banking Standards Board (BSB) released a Statement of Good Practice and Supporting Guidance to help firms in assessing fitness and propriety of staff under the Certification Regime. The consultation period has now closed on further guidance. The BSB proposals  sought to provide support to firms on Certification Risks and Issues. We understand the BSB is now reviewing feedback with a view to developing further good practice guidance. The proposals consulted on can be viewed here and our response is available here.
Information About Current Account Services: The FCA was tasked with investigating and implementing additional information following the CMA Retail Banking Market investigation which reported in Autumn 2016. CP17/24 proposed a number of metrics designed to help consumers form meaningful comparisons between providers but none which highlighted committment to a cultue of professionalism. Our response which challenges the FCA on this point can be read here.
Financial Advice Market Review [FAMR]: The FCA has published further guidance and has recently consulted on changes to the Handbook to align with the change in definition of advice, and outlines guidance on personal recommendations, guidance arising from the experiences of the FCA’s Advice Unit and guidance on insistent clients. Click here to see our FAMR update.
Innovation: The FCA has also published a report outlining lessons learned during the first year of its regulatory sandbox.  The sandbox allows firms to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place. Read more here.
FCA Business Plan: Our summary of the Financial Conduct Authority's 2017 Business Plan and associated documents can be found here.

One item already in progress is a Strategic Review of Retail Banking Business models [not to be confused with the work last year by the CMA - read our note]. Launched in May, the specific objectives of the FCA review are to:

  • understand retail banking business models in greater depth
  • understand how free-if-in-credit banking is paid for
  • understand the impact of changes such as increased use of digital channels and reduced branch usage on business models 

The review will encompass retail banks, building societies and credit unions and focus is on business models and what conduct/competition concerns these models may create. The FCA has published its Purpose and Scope but no further update is expected until Q2 2018. Full details can be viewed here

Live and Local to check if the FCA are running any events, in your area on a topic of interest follow this link to their website


FCA Consumer Approach thmb
FCA Future Approach to Consumers


FCA Financial Lives Survey

FCA 2017 Financial Lives Survey


FCA review of Banking Models

FCA Strategic Review of Retail Banking Business Models